OPERATING AND GEOGRAPHICAL SEGMENTS

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

OPERATING AND GEOGRAPHICAL SEGMENTS

OPERATING AND GEOGRAPHICAL SEGMENTS

The Company designs, develops, manufactures and sells semiconductor integrated circuit products. The Company’s operating segments represent management’s view of the Company’s businesses and how it allocates Company resources and measures performance of its major components. Each segment consists of product families with similar requirements for design, development and marketing. Each segment requires different design, development and marketing resources to produce and sell products.

A summary of each reportable segment follows:

• Microcontroller. This segment includes Atmel's general purpose microcontroller and microprocessor families, AVR® 8-bit and 32-bit products, Atmel^®| SMART^TM ARM^® based products, Atmel's 8051 8-bit products, designated commercial wireless products, including low power radio and SOC products that meet Bluetooth, Bluetooth Low Energy, Zigbee and Wi-Fi specifications, Atmel's maXTouch capacitive touch product families and optimized products for smart energy, touch button, and mobile sensor hub and LED lighting applications.

• Nonvolatile Memory. This segment includes electrically erasable programmable read-only ("EEPROM"), erasable programmable read-only memory (“EPROM”) devices, secure cryptographic products and other advanced security solutions.

• Automotive. This segment includes devices for automotive electronics, including products using radio frequency technology.

• Multi-Market and Other. This segment includes application specific and standard products for aerospace applications and legacy products. On April 16, 2015, the Company completed the sale of its XSense touch sensor manufacturing assets and separately licensed to UniPixel, Inc. its XSense intellectual property assets, which the Company is retaining. See Note 14 for further information.

The Company continually evaluates operating segment performance based on revenue and income or loss from operations excluding share-based compensation and other non-recurring items. Because the Company’s operating segments reflect the manner in which management reviews its business, they necessarily involve subjective judgments that management believes are reasonable in light of the circumstances under which they are made. These judgments may change over time or may be modified to reflect new facts or circumstances. Operating segments may also be changed or modified to reflect products, technologies or applications that are newly created, or that change over time, or other business conditions that evolve, each of which may result in reassessing specific segments and the elements included within each of those segments.

Operating segments are defined by the products they design and sell. They do not sell to each other. The Company’s net revenue and segment (loss) income from operations for each reportable segment is as follows:

Information about Reportable Segments

	Micro- Controller		Nonvolatile Memory		Automotive		Multi-Market and Other			Total
	(in thousands)
Three months ended March 31, 2015
Net revenue from external customers	$	218,786	$	43,748	$	35,745	$	20,009		$	318,288
Segment income from operations	$	23,756	$	11,670	$	3,297	$	1,963		$	40,686
Three months ended March 31, 2014
Net revenue from external customers	$	235,141	$	35,651	$	40,971	$	25,598		$	337,361
Segment income (loss) from operations	$	18,826	$	5,047	$	6,754	$	(557	)	$	30,070

The Company's primary products are semiconductor integrated circuits, which constitute a group of similar products. Therefore, it is impracticable to differentiate the revenue from external customers for each product sold. The Company does not allocate assets by segment, as management does not use asset information to measure or evaluate a segment’s performance.

Reconciliation of Segment Information to Condensed Consolidated Statements of Operations

	Three Months Ended
	March 31, 2015			March 31, 2014
	(in thousands)
Total segment income from operations	$	40,686		$	30,070
Unallocated amounts:
Share-based compensation expense	(13,687		)	(15,617		)
Loss from manufacturing facility damage and shutdown	—			(7,056		)
Acquisition-related charges	(4,403		)	(1,628		)
French building (underutilization) and other credits	288			(1,296		)
Restructuring (charges) credits	(1,147		)	224
(Loss) gain related to foundry arrangements	(1,192		)	58
Consolidated income from operations	$	20,545		$	4,755

Geographic sources of revenue were as follows:

	Three Months Ended
	March 31, 2015		March 31, 2014
	(in thousands)
China, including Hong Kong	$	93,408	$	93,201
United States	57,998		52,910
Germany	41,810		59,261
South Korea	26,175		33,032
Japan	15,013		5,540
Taiwan	10,166		10,718
Singapore	9,961		11,590
France	3,142		3,080
Rest of Europe	31,549		38,353
Rest of Asia-Pacific	23,125		24,022
Rest of the World	5,941		5,654
Total net revenue	$	318,288	$	337,361

Net revenue is attributed to regions based on ship-to locations.

The Company had one distributor that accounted for 14% of net revenue in the three months ended March 31, 2015. No end customer accounted for 10% or more of net revenue in the three months endedMarch 31, 2015 and 2014. The Company had two distributors that accounted for 16% and 13%, respectively, of net revenue in the three months ended March 31, 2014.

One distributor accounted for 13% of accounts receivable at March 31, 2015 and no end customer accounted for 10% or more of accounts receivable at March 31, 2015. Two distributors accounted for 17% and 14%, respectively, of accounts receivable at March 31, 2014 and no end customer accounted for 10% or more of accounts receivable at March 31, 2014.

Physical locations of tangible long-lived assets were as follows:

	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	88,965	$	92,466
Philippines	56,866		56,094
Germany	17,119		17,920
France	12,591		13,714
Rest of Asia-Pacific	20,338		20,237
Rest of Europe	5,324		5,854
Total	$	201,203	$	206,285

Excluded from the table above are auction-rate securities of $1.1 million at March 31, 2015 and December 31, 2014, which are included in other assets on the Condensed Consolidated Balance Sheets. Also excluded from the table above as of March 31, 2015 and December 31, 2014 are goodwill of $188.6 million and $191.1 million, respectively, intangible assets, net, of $46.9 million and $50.3 million, respectively, and deferred income tax assets of $117.4 million and $117.3 million, respectively.